Pair Correlation Between DOW and PowerShares SP

This module allows you to analyze existing cross correlation between DOW and PowerShares SP 500 Quality ETF. You can compare the effects of market volatilities on DOW and PowerShares SP and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in DOW with a short position of PowerShares SP. See also your portfolio center. Please also check ongoing floating volatility patterns of DOW and PowerShares SP.
 Time Horizon     30 Days    Login   to change
 DOW  vs   PowerShares SP 500 Quality ETF
 Performance (%) 

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to generate 1.06 times more return on investment than PowerShares SP. However, DOW is 1.06 times more volatile than PowerShares SP 500 Quality ETF. It trades about 0.66 of its potential returns per unit of risk. PowerShares SP 500 Quality ETF is currently generating about 0.52 per unit of risk. If you would invest  2,472,665  in DOW on December 20, 2017 and sell it today you would earn a total of  138,900  from holding DOW or generate 5.62% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between DOW and PowerShares SP


Time Period1 Month [change]
StrengthVery Strong
ValuesDaily Returns


Almost no diversification

Overlapping area represents the amount of risk that can be diversified away by holding DOW and PowerShares SP 500 Quality ETF in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on PowerShares SP 500 and DOW is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on DOW are associated (or correlated) with PowerShares SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PowerShares SP 500 has no effect on the direction of DOW i.e. DOW and PowerShares SP go up and down completely randomly.

Comparative Volatility

 Predicted Return Density